Tuesday, July 31, 2007

Another new lawsuit was recently filed against Sony, this one by Parallel Processing. While I am still searching for a freely available version of the 5 page complaint, reports are that the infringement suit is based on a parallel processing system from a patent dated October 8, 1991 (which I assume is patent 5,056,000). This is, of course, how the Cell processor works.

The patent case claims irreparable harm, and demands the impounding and destruction of all infringing devices. While this is a legitimate claim to remedy, it seems extremely unlikely that a court would grant anything more than money damages in this case. So I, and the other PS3 owners, can rest easy knowing that a judge won't be impounding our systems as a result of this case.

The bigger question is whether Sony actually did infringe on this patent to create the PS3, and if so, how many Immersion type incidents can Sony handle?

Monday, July 30, 2007

Now that I am back, I can address the Silicon Knights case, which unfortunately came to light during my brief break. The full complaint can be found here. Due to my slightly delayed response, many sites have already published their analysis of the complaint, and most of the major issues have been addressed. I personally think Gamasutra did an excellent job breaking down the actual complaint in their article.

There are a few issues, however, that I don't think other sites have adequately discussed.

1. If the allegations are accurate, this could result in a huge boost in licenses for id's new id Tech 5 engine and Valve's Half-Life 2 engine. The reality is licenses for engines sell just like any other product, and bad publicity hurts sales. While Epic may have fixed many of the Unreal 3 issues through Gears (at least in the Xbox 360 context), developers may be concerned about ongoing support for the engine, and may remain wary once Epic starts taking early orders for the seemingly inevitable Unreal 4 engine.

2. If Silicon Knights's engine is viable, I expect others will use it as well. In fact, I could see Microsoft possibly adapting it as an answer for their developers. The Halo 3 Engine, while impressive, will likely remain unlicensed (just as the prior Halo engines have not been used by other companies). With the SK Engine, the licensing seems more like an option, especially with so many companies complaining of the high development costs for the next gen consoles.

3. While this suit may be new for the game industry, it's relatively common in general. This is, at its core, one of the simplest contract disputes. Party A promised to deliver a good in form X, and Party B alleges that good arrived in form X-1 and Party A never fulfilled their contractual agreement. While this is a gross oversimplification, it is the core of the lawsuit.4. While many have been quick to claim that Silicon Knights's demand for profits from Gears is over-reaching, it is actually quite common. When a company is unjustly enriched at the expense of other companies with whom they have a contract, damages are often taken as the best estimate of the unjust enrichment. If Too Human had launched close to the same time as Gears of War, would Gears have enjoyed such phenomenal sales? Maybe, maybe not. Was there a defined benefit in both publicity and sales for Gears as a result of having little competition? Almost certainly. Would Too Human have been competition? Most likely. Could the market then have supported full sales of both games? More likely then than now since fewer games were available for the Xbox 360. These are the kinds of questions that go into an analysis of unjust enrichment damages. Assuming Silicon Knights can show that Epic neglected the licensees in order to work on Gears, the Gears profits will become some measure of damages. While it seems unlikely Silicon will receive all of the profits they demanded, a substantial award for Silicon would not be out of the ordinary.

Those are just four comments on the case. It will be fascinating to see what results in the court, or the pre-trial settlement.

I do occasionally step beyond the bounds of the typical Law of the Game topics to editorialize, and politics has long been an interest of mine, as evidenced by my degree in Government (Political Science) from the University of Texas.

A new campaign ad by Presidential hopeful Mitt Romney declares that our children are drowning in a an ocean of filth, citing violent games among other media, and states that it is time to clean up the waters. I have nothing against Mr. Romney personally, he is just the latest in a standing trend against the game industry.

We are drowning, all of us, in a sea of shallow politics and fear mongering. Both Presidential and Congressional approval are at historic lows, and yet, rather than deal with issues that matter, the politicos of the United States have opted to gravitate to video game violence. Why? It's always easy to amass votes under the guise of "protecting the children" from the evils of society, whereas it seems like an impossibility to win support on a platform of parental responsibility. And yet, it has become apparent that many parents are, simply put, failing their children. But should the battle cry of those wishing to defend those who cannot defend themselves really be "The government should do it for us!" Do we, as a people, really want to leave the decision on how to raise our children in the hands of a body that is barely approved of by a fourth of the population?

There are ample other issues that this country should resolve in a timely fashion, and I think it is high time that the people demand more from their representatives than an appeal to the lowest common denominator of potential issues. No matter where you may stand on other issues, or whom you may support, wouldn't you prefer a response to an issue of substance rather than repeated attacks on the gaming industry? Is there really a value to expend legislative time on a bill that will place a 16 year old GameStop clerk in jail for selling a game rated "M" to another 16 year old? Moreover, in the wake of such legislation, will we have to restrict the hiring practices of game retailers, when no such restriction exists for retailers of movies or books?

I can only imagine the possibilities of the path on which we tread. For now, it may be sales restrictions, but in the future, it could be an act of "child endangerment" to let your own children play games that you determine are appropriate for them. It is not beyond the realm of possibility that we end up in a world where a parent can let a 15 year old watch an R rated movie without repercussion, but can face a CPS investigation or criminal charges for letting the same child play an M rated game. This could be the result of letting fear mongering dictate media policy.

I believe we should expect more from our elected officials. They are supposed to represent us, not dictate our opinions to us. Accordingly, the time may be upon us to let our voices be heard and write to our representatives to let them know with the utmost respect that we are tired of their time being wasted on this non-issue.

I don't want Washington dictating what video games can and can't be played in the privacy of my living room. Do you?

Tuesday, July 17, 2007

China Daily is reporting that the official Chinese crackdown on extended gaming sessions by teenage users has begun. The concept is one that many hope never reaches the level of government regulation in the United States. Specifically, users under 18 are allowed to play online as long as they wish. However, after 3 hours of play, any points earned (i.e. experience points in RPGs) are cut in half. After 5 hours of play, no points are earned at all.

How is this system enforced? Game companies are required to integrate a uniform Chinese ID into their system. It would be the equivalent of a game company requiring your Driver's License number to register to play. The game company can then know your age and limit you if necessary.

Of course, there is always the potential for fraud, such as a kid using a parent's ID number. Pacific Epoch is reporting that The9 (the Chinese provider for World of Warcraft) will have a tool that allows parents to see if their IDs are being used. While this is certainly something, it seems like the system will never likely be perfect, short of requiring biometrics or something similarly difficult to circumvent.

While I can see the value of limiting a child's play time, the role of acting as the limiter will hopefully remain with the parents in the United States. There is no reason to appoint the government as a pseudo-parent for issues such as these that are so easily manageable by the parents themselves. However, software companies may see a benefit to incorporating a system that the parent can enforce in countries like the US. However, no technology can ever truly take the place of simple presence. Children can inevitably find ways around most technological or other barriers, but they can't get around a responsible parent.

Friday, July 13, 2007

Tournament.com has opened its doors, allowing players to wager real money on matches of Counter Strike and Half Life 2 Deathmatch, with Day of Defeat to follow soon. The site's FAQ points to what will be the issue for their viability going forward:

2. What are "games of skill"?Games of skill, such as those we provide here, are games where the result and outcome are decided purely by the skill of the players involved and not by any element of chance or luck.Unlike games of chance, skilled gaming is legal in most parts of the world and is determined by the skill of the participants.

1. Are the games they are allowing wagering on "subject to chance"?2. Are the players "amateur athletes"?

Either of these could place the Tournament.com system well within the crosshairs of the UIGEA. Unfortunately, the answer to either question is convoluted at best.

Subject to Chance

The "subject to chance" language was most likely added to combat online poker, and as most people know, while there is a skill to playing poker, it is still subject to the luck of the draw. Anyone who's played has probably had a run of bad hands in a row, and that's just how the game can go. On the converse, you can also have a run of good hands in a row.

First person shooters can have the same effect. Everyone has had one of those rounds where you just spawn in the wrong place every single time. Or one of those rounds where you just seem to get every kill. Or in a game like Counter Strike, there's always the chance that you get stuck with a horrible team. Or you're the one dragging behind on an excellent team.

In the grand scheme of things, I would place most FPS games in about the same chance strata as online poker, and given that, they would fall in the UIGEA unless the SGPA passes.

Amateur Athletes

The classification of gamers as athletes is still widely debated. Dictionary.com defines an athlete as: a person trained or gifted in exercises or contests involving physical agility, stamina, or strength; a participant in a sport, exercise, or game requiring physical skill.

To me, a gamer is, by that definition, an athlete, even though it is not in the traditional vision of an athlete. For that matter, if you consider professional billiards players or archers or marksmen or curlers athletes, then a gamer is much the same. These are sports of precision rather than brute force or extended stamina.

Sec. 3702. Unlawful sports gambling It shall be unlawful for - (1) a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact, or (2) a person to sponsor, operate, advertise, or promote, pursuant to the law or compact of a governmental entity,

a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly (through the use of geographical references or otherwise), on one or more competitive games in which amateur or professional athletes participate, or are intended to participate, or on one or more performances of such athletes in such games.

In short, it is illegal to bet on sports online. Therefore, if these games are considered "sports" online, and then it would be illegal to bet on them. Since Athlete is undefined in the act, it comes to the "common meaning" of the term, which arguably does include gamers.

These are just my humble estimations on the matter. Tournament.com or any similar site would need to retain counsel to examine their individual situation more closely. Of course, the Skill Games Protection Act may change the playing field, so to speak, of online gambling. We will have to wait and see.

Tuesday, July 10, 2007

Joystiq is reporting that the first class action lawsuit against Microsoft over the Xbox 360 has been filed. The suit, which I have verified was filed, is in Florida and is asking $5 million on a combined warranty and strict liability theory.

There are two thoughts this case brought to mind. First, it seems as though there is a better chance of recover here than on the ubiquitous "Three Red Lights" issue. Microsoft has at least made some effort to correct the red lights through the warranty extension (although those who took some action which voided the now re-instated warranty during the gap period may have better standing in that regard). The disk scratching, however, has largely gone unaddressed.

Second, while I understand the warranty theories presented in the case, the strict liability theory seems to be a bit of a stretch. While I am no expert on Florida law, strict liability usually requires a physical harm (physical injury) or unreasonably dangerous condition to be created by the product. In fact, paragraph 66 of the pleading makes this claim. I see no such issue with a scratched disk, unless users are suffering heart attacks when Gears of War won't read or a repetitive stress injury from ejecting and re-inserting the disk, hoping it will work.

Scans of the lawsuit are available on Joystiq for free, or through the Florida ECF/PACER system (not free). This may be the first Xbox 360 suit, but it may also not be the last.

Saturday, July 7, 2007

As I reported recently, my Xbox 360 died. And so, I called 1-800-4-MY-XBOX today to order my coffin in the wake of the new warranty extension. While I was on the phone, the rep (a friendly Canadian fellow) informed me that my surge protector had probably caused both of my 360 deaths.

My immediate reaction was a disbelieving "What?"

The explanation (which he said comes from somewhere up the Microsoft chain) is as follows:

The Xbox 360 is highly sensitive to reductions in power, and even the slightest cut in power can cause things like the fans and even the DVD laser to malfunction. Surge protectors can cause this, and probably 90% of the consoles they see have all failed in 6-12 months of being plugged into a surge protector.

Well, my two systems did die in that window, and they were both plugged into a surge protector. But does this explanation even make sense? I'm not an electrical engineer, nor a physics expert, so it's not really my place to say. However, perhaps someone out there in the vast expanses of the world wide web can weigh in on this topic.

Is it the power? Or is this just another misdirection?

UPDATE: Upon further research, similar reports are appearing in a number of forums, and a Knowledge Base article seems to say the same thing. From that article, "Plug the power supply directly into a known good wall outlet. Do not use extension cords or power strips."

Friday, July 6, 2007

When last we discussed copyright, I evidently left more than a few issues up in the air, as evidenced by the number and length of comments on the Copyright issue. And, as promised, I finally have enough of a lull in the news to address all of the issues from those comments. So consider this What Everyone Needs to Know About Copyright Part 2.

Idea vs. Expression

One thing that, as was pointed out, is clear to some and not to others is the concept of idea vs. expression. As I stated previously, copyright only protects the expression. An easy way to examine this is to think of any fiction novel. That novel has many elements, the actual text, the plot, the characters, the theme, the tone, etc. Copyright certainly protects the word for word expression of the book. Copyright also protects the combinations of elements of the book to the extent that they are improperly appropriated (a good case for reference is Nichols v. Universal Pictures). It's a substantiality of the copied elements type test.

It is, unfortunately, extremely subjective and complex. But to give an example, if I took a book and changed the names of all the characters, but left the rest in tact, I would likely be improperly appropriating the book. On the other hand, if a book I write has a few character names in common with another book, and the rest is wholly unrelated, it would likely not be an improper appropriation.

Rights Attaching at Creation

Another issue that was brought up was when rights attach. This is, again, complex, especially in an international environment. In the US, common law copyright attaches at creation, and federal copyright protection attaches at registration. Other countries each have their own laws in this regard. However, certain treaties may revert back to the laws of the original creator's state as applied to other nations. I am specifically referring to the Berne Convention. To date, I haven't found a good international copyright law comparison chart, so I will unfortunately have to leave this issue unanswered to that extent.Copyright, Licensing, and the EULA

The other major issue that was brought up was the issue of copyright, licenses and EULAs. This gets more than a little complicated, so I will try to break this down into smaller issues.

Backup Copies

The backup copy rule embodied by section 117 is very limited in nature. It allows you to make one backup copy of a piece of software that you own for backup purposes only assuming you either transfer it with the original or destroy it if you transfer the original. Where this becomes more questionable is with console games, as they are "computer programs" but they aren't for use in a personal computer. I would tend to think that no court would penalize someone for making a backup copy of a console game, so long as it is purely for archival purposes.

An interesting issue is that section 117 only authorizes backup of a program, not music or video. In the context of a game, I tend to think that the elements are inseparable. However, that does mean the section doesn't technically allow you to archive your, say, iTunes files. This presents a further peculiarity, since Apple tells you (ad nausem) to backup your iTunes files. I doubt the RIAA will be knocking down anyone's door to stop this practice, but it does demonstrate as least one element of the copyright law that still lags behind reality.

Licenses

The concept behind buying a copy of a game is rather complex, so I think it can be more easily explained by comparing it to other mediums. When you buy a CD, you have physically bought a copy of the music. However, you can only use that music for personal enjoyment. In fact, even bars, hotels, and retail stores have to have a separate license to use that music in their establishment (and groups like ASCAP do police this heavily). The same goes for using music in, say, a TV show or movie. Taking another medium, when you buy a DVD, you have bought a physical copy, but its use is limited to personal watching. You can't then take the DVD and show it to an auditorium of 500, or take scenes and splice them into another movie you are making. On the other hand, if you want to use the disk, CD or DVD, as a coaster or Frisbee, you are free to because it is making use of the storage medium, not the copyrighted work itself.

A game is much the same as a CD or DVD. Yes, you have purchased a copy. But its use is limited to personal play on the system you bought it for. Machinima is a violation of that limited use without a separate license. The major difference is while the use of music and video is fairly well defined, the use of game software is more amorphous, and more analogous to computer software. Hence, rather than using well established warnings, a complete End User License Agreement (EULA) is included. I actually did an informal poll among some Xbox 360 and Wii games I had lying out. While none of the Wii games had them, some of the Xbox 360 games had the EULA (or a portion thereof) in the instruction manual.

The EULA, Copyright, and Machinima

The last big issue the table is a little more on the EULA as it relates to machinima. This is an area of the law that is rather murky as there is no case law I know of on the topic. A hypothetical similar to the following was posed:

If a machinima is made using a game engine but none of the games original maps, character models, etc., it would violate the non-commercial use of the EULA, but is it a derivative work?

Well, this is about the most unstable ground for a machinimist to be on. It could be considered a derivative work, but there is no firmly established framework to look to on this matter. Think of it this way, using the underlying engine to create the game that is filmed is creating a derivative of the original. The machinima is then a derivative of the derivative.

Moreover, you can't avoid the EULA. Going back to the previous, you own a copy of the game and yet it can only be used legally in a limited scope. This is typically dictated by the EULA. By virtue of using the copy of the software, you have agreed to the EULA. Of course, those EULA terms still likely need to be reasonable to avoid being struck down.

Conclusion

Copyright is highly complex. It is moreso on newer mediums of expression than it is on more established mediums, and until the courts weigh in on the application of copyright to many of the issues I have covered, there may not be any real clarity. The best advice I can offer you is to try to use common sense, but if you are getting into a gray area (especially where commercial uses are involved), please consult an attorney. It's better to pay a few hundred or thousand in legal fees for advice than tens or hundreds of thousands in defending yourself in court and/or possible fines and judgments.

Tuesday, July 3, 2007

I'm sure many of you know that the Austin GDC is coming up this September. What you may not know is that they have opened up the selection process for presentations to a vote. What you may also not know is that I have two presentations in the running. Both are lectures in the Online Games - Business and Management topics.

Emerging Legal Concerns for Online Games: What Every Manager Needs to Know Speaker/s: Mark MethenitisTrack / Format: Online Games - Business & Management / LectureOverview: This presentation provides an overview of legal issues primarily facing MMO developers by looking at both the existing legal approaches and theoretical alternatives. These issues often apply to other online developers as well, especially those exploring new game and business models. Topics will include: Intellectual Property Ownership and Licensing, Interplay Between Real and Virtual Currency, and Online Gambling and the new Unlawful Internet Gambling Enforcement Act.

Legal Issues In International Game Publication Speaker/s: Mark MethenitisTrack / Format: Online Games - Business & Management / LectureOverview: As a result of the Internet age, virtually every game released in the United States is released internationally to some degree. This presentation addresses the issues that face developers in releasing games in multiple countries. Topics of discussion include: International Intellectual Property Rights, International Taxation and Tax Treaties, International Media Regulation, International Trade and Emerging Issues in International Law.

So, if these topics sound interesting to you, or you would like to see me lecture at the Austin GDC in September, please go vote. And while you're there, check out some of the other presentations up for voting, especially if you plan to attend the conference.

Editor in Chief

Mark Methenitis is an attorney in Dallas Texas. Mark received his Juris Doctorate and his Master of Business Administration from Texas Tech University and his Bachelor of Arts from The University of Texas.

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